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TMI Blog2007 (10) TMI 153X X X X Extracts X X X X X X X X Extracts X X X X ..... mad Mukhia in the court of Chief Metropolitan Magistrate, Esplanade, Mumbai under Section 135(1)(ii) of the Customs Act, 1962 and Section 120B of the Indian Penal Code, 1860. The petitioner on 12.11.2006 made an application before the Compounding Autority for compounding of offences as set out in the complaint dated 13.2.2004 under the Customs (Compounding Offences) Rules, 2005. The Respondent No. 3 as the Compounding Authority, without dealing with the various arguments advanced by the petitioner rejected the application only on the basis of instructions contained in the CBEC Circular No. 54/2005-Cus dated 30.12.2005. That circular sets out that the Compounding Authority shall reject all applications where alongwith an offence under the Customs Act, any offence is alleged to have been committed under the Indian Penal Code, 1860. The Petitioner by the present Petition has challenged the circular dated 30.12.2005 and has also sought a mandamus to direct Respondent No. 2, the Central Board of Excise and Customs to withdraw the circular dated 30.12.2005. Though no relief has been sought for quashing the order rejecting the application for compounding of the offences, relief has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t there is charge of criminal conspiracy against the Petitioner under Section 120B of the Indian Penal Code, 1860 and considering the CBDT circular, the case was covered by that circular and as such could not be compounded. The Petitioner's contention was that notification 114/05 dated 30.12.2005 does not restrict the power of the Chief Commissioner for compounding the offences and that the Board's circular cannot take away such discretionary powers available with the Chief Commissioner. The contentions urged on behalf of the Petitioner were rejected. The Compounding authority relied on Para 3 of the Circular and accordingly rejected the application for compounding. 6. The questions that arise for consideration are two fold. One is the notification of the Central Board of the Excise and Customs ultra vires section 137(3) and the Rules framed there under. Second is the impugned notification being Circular No. 54-05-cus dated 30.12.2005 issued by the Central board of Excise and Customs within the powers conferred on it under Section 151A of the Customs Act and if not so, is there any other provisions whereby such direction could have been issued by the Central Board of Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be governed by the general Law of compounding of offences depending upon the nature of the offence and would be the power normally of a court of Law. Thus, if in the course of import or export apart from the violation of the provisions of the Customs Act there are violations of any other provisions of law, then no power has been conferred on the Chief Commissioner of Customs to compound those offences under this Act. The power conferred therefore, is limited to the offences under the provisions of the Customs Act alone. What would be the effect of compounding offences under the Customs Act, and pending criminal proceedings, before the judicial forum need not be gone into as that would be power on that judicial forum to decide whether on compounding of the offence under Customs Act, the material on record would led to framing of charges under any other Act or if charge is framed whether the accused before it can be discharged or acquitted of the offences charged. The effect of compounding of offences under the provisions of the Customs Act cannot therefore, result in an accused being discharged of offence under other Acts, like Indian Penal Code, merely because the offence under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces, where it has been decided not to allow compounding for the second time. For the purpose of compounding, 'Substatntive or non-technical offence' would mean offences covered under section 135 and 135A of the Customs Act. Similarly under Central Excise Act this would refer to offences covered under sub-section (1)(a), (1)(b), (1)(bb), (1)(bbb), (1) (bbbb) and (1)(c) of section 9. On the other hand, 'Technical offence' would mean offences covered under section 132, 133, 134 of the Customs Act and section 9(1)(d) of the Central Excise Act. Accordingly compound for substantive offence shall be allowed only once. 3. It has also been decided by the Board, that considering the serious implications of certain offences mentioned below, these shall not be considered for compounding and any applications received from one of more categories of the following persons should be rejected. (i) Any person who along with offence under Customs Act, has also committed or has also been accused of committing an offence under any of the following Acts: (a) Narcotics Drugs and Psychotropic Substances Act, 19785; (b) Chemical Weapons Convention Act, 2000; (c) Arms Act. 1959; (d) Indian Penal Code (e) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pounding authority shall examine the application in accordance with the above guide-lines and pass an appropriate order under sub rule (3) to rule 4. A copy of such order shall also be forwarded to the Court. After payment of compounding amount as per the above order the reporting authority shall move an application before the said court informing about the compounding of offence and requesting the court to dispose of the case accordingly. if the court accepts the order of compounding of offence and disposes of the case, then the order of compounding authority becomes final. However, in cases where the Court rejects the request of the department for grant of immunity from prosecution by compounding of offences, then the compounding amount paid by the applicant as per order of the compounding authority shall be refunded to the applicant. " 10. The power of the Central Board of Excise and Customs to issue instructions to Officers of Customs is contained under Section 151A which reads as under : "151A : Instructions to officers of customs- The Board may, if it considers it necessary or expedient so to do for the purpose of uniformity in the classification of goods or with respect t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ra 3, in our opinion the same would interfere with the exercise of discretion conferred on the Chief Commissioner of Customs by Section 137(3) of the Customs Act and to that extent the sub paras (iii) and (iv) of Para 3 would clearly be ultra vires of section 137(3) and consequently would have to be declared as null and void. In so far as Para 4(i) is concerned, it merely clarifies the position of law as already set out by us, namely that the offences committed by officers of Customs/Central Excise do not merit compounding as it is a matter between the State and its employee. It is merely clarificatory. Para 4(ii) really does not interfere with the exercise conferred on the Commissioner of Customs and is also not referable to power under section 151 but is really in the nature of information. In so far as Para 5 is concerned, in our opinion, in the absence of government making any rules under section 156, it was not open to prescribe procedure for compounding of offence referable to the power under section 137(3). Para 5 is again merely procedural and does not affect the discretion of the officer conferred with the power. In respect of the proceedings which are pending before the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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